Kind of Blue: Joe Moinian Lives the 3 Columbus Circle Dream

Can SL Green help reclad Big Joe's image with a building nobody gets?

The sun was glistening off the blue glass of 3 Columbus Circle last Thursday. A clutch of nattily dressed real estate executives standing on the 19th floor terrace had to squint against the strong light, reflecting off the high-tech carapace of the building formerly known as 1775 Broadway. Once the headquarters of Newsweek, and before that General Motors, the building began life in 1928 as a sturdy Art Deco brick box towering over Columbus Circle. One of the biggest buildings in the city at the time, it was a show of emerging industrial might in the heart of Manhattan.

But that was before GM moved to the other end of 59th Street, erecting its glass and marble monolith. That was before the arrival of the Trump International, the Time Warner Center and the Apple store on Fifth Avenue. Glass has become big business across the city, where brick and steel still sometimes rules—the Empire State Building is still our most recognizable landmark. Glass was what Joe Moinian, the Iranian-Jewish developer, former cook and now master of some five million prime square feet, decided to go with, then. It was the boom-boom new millennium: Why tear down a perfectly serviceable building when you could simply sheath it in a slick new suit, ask those $100-per-square-foot rents (the standard for a top-of-the-line tower) and cash the checks?

Well, those days are long gone. All over New York, office towers sit empty, with a vacancy rate around 12 percent, considerably higher than the 7 percent of 2006, when Mr. Moinian laid out his ambitious plan to remake the building. Since then, he has been forced into a partnership with the city’s largest landlord, SL Green, which has recently been feasting on dozens of buildings across the city, buying up hefty stakes and entire properties.

Together, they had to fight off a hostile takeover by Steve Ross, whose Related Companies owns the gleaming Time Warner towers across the street. Mr. Ross had wanted to tear down 3 Columbus to build apartments and a Nordstrom’s. He reportedly called it ugly, among other epithets. Even after SL Green cut a check last November for $258 million—the largest ever cashed by the county clerk’s office, according to The Real Deal—to cover the mortgage note on which Deutsche Bank and Related were trying to foreclose, they still took the pair to court, and settled only this March.

Asking rents at 3 Columbus Circle are almost half what they once were, and a number of brokers questioned whether Moinian and SL Green would be able to realize even that.

Still, there was Mr. Moinian, standing on the terrace, gesturing around Columbus Circle, giving The Observer a tour of his trophy, tarnished as it may be. “We have spent a lot of money and time and effort to get this property to where it deserves to be,” Mr. Moinian said. He raised his hands, as if making an offering, and gestured up and down Eighth Avenue. “It now fits into a class with the Time Warner and Hearst. It sets a new standard.”

“That is a rather extreme statement,” one leasing agent told The Observer days later. “If you put lipstick, or a new glass facade, on a pig …” He trailed off, his point conveyed.